Herasymenko Y. Institutional support for the development of environmentally-oriented business in the agricultural sector

The paper summarizes theoretical principles concerning the formation of the institutional system of environmentally-oriented business in the agricultural sphere. The assessment of institutional approaches in the study of the agrarian sector of Ukraine was performed. It is emphasized that the institutional environment is important for the formation of the economic system in each country. Institutions consist of both formal and informal rules and restrictions. They can be connected and function in an economic, political and unofficial system. The theoretical foundations of the sustainability of agricultural development as a strategic direction of its transformational changes are substantiated. It is noted that sustainable development is currently considered in the world as the leading ideology for development of society in most developed countries. The classical definition of sustainable development is that it is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The paper identifies the essence and characteristics of environmentally-oriented agribusiness. The methodological approaches to estimate the level of eco-oriented agribusiness efficiency are summarized. The thesis points out the importance of economic policy of the state in defining the tools for implementing the economic mechanism, agricultural policy in the agrarian sphere of the economy, developed in accordance with the strategic and tactical goals of the country and industry development. The implementation of economic policy takes place with the implementation of accepted in the country methods, forms, and tools of action. The condition and tendencies of ecologically-oriented production in Ukraine were investigated. It is pointed out that the market for organic products in recent decades is developing fast in the world. The development of organic livestock industry is second to crop production. This is primarily due to more complex technological features of the transition to organic production. The study analyses the production of organic products in agricultural enterprises identifying the difference compared to regular enterprises. It is found out that organic enterprises had a slightly higher level of yield of marketable products per 1 hectare of arable land. According to the amount of income and profitability of wheat, the difference in organic and conventional enterprises was significant. The analysis showed that the maximum profit and efficiency of wheat production was observed in the group with a yield level of 40.1-50 c/ha. It is noted that the functioning of the market of ecologically-oriented agrarian business requires a relevant economic mechanism that would motivate manufacturers to switch to the production of organic products. A conceptual model of a possible economic mechanism for the production of environmentally-oriented products is proposed. State support for eco-oriented business should embrace producers, include measures to create demand for organic products and strategic actions to promote and build the reputation of these products. The paper presents conceptual approaches to the formation of the mechanism of state support for environmentally-oriented agrarian business during the transition period. It is proposed the mechanism of state support for agricultural enterprises and farms that have decided to switch to the production of organic products during the transition period. This mechanism takes into account possible crop losses when producers reject the use of chemicals and allows to get a compensation at the level of profitability of their production. The strategic directions of development of ecologically-oriented agribusiness in Ukraine were determined. It is performed simulation of the potential volume of consumption of organic products, taking into account the level of income of different groups of households and the differences between the prices of organic and conventional products. The thesis shows the projection of the consumption of organic products per inhabitant and in absolute terms for the period up to 2022 in different countries of the world.